fiscal year may be stated, on the basis of the foregoing estimates, as fol lows: FISCAL YEAR ENDING JUNE 30, 1837. Ordinary postal revenue-total estimated amount.... Total estimated gross receipts for year ending June 30, 1887........ Leaves estimated deficiency of revenue to be supplied out of the general Treasury.... Estimated expenditures as above...... Add estimated amount subject to certification on account of mail transportation on Pacific railroads... Estimated total cost of service Excess of estimated cost of postal service over estimated postal reve nue. 46, 6-2, 710 83 €30,000 00 47,312,710 83 53, 523, 968 59 6,211,257 76 53, 523, 968 30 1,336, 431 m 54, 860, 449 24 7,547,738 76 The estimated revenue of the year ending June 30, 1887, is $6,211,257.76, or 11.6 per cent., less than the estimated expenditures, and $7,547,738.76, or 13.7 per cent., less than the total estimated cost of the postal service, inclusive of the estimated amount subject to certification on account of mail transportation on the Pacific railroads. As compared to the year ended June 30, 1886, the estimates for the current fiscal year contemplate an increase of $3,376,462.13, or 7.6 per cent., in the net postal receipts; of $2,445,700.77, or 4.7 per cent., in the total expenditures payable out of appropriations; and of $2,670,043.37, or 5.1 per cent., in the total cost of the postal service. In the estimated expenditures no allowance is made for compensation for the performance of special-delivery service, no definite appropriation being necessary for that object; but the outlay will be more than reimbursed by the receipts from that source, which were not taken into aecount in the estimates of revenue. The tendency of the system will be, therefore, to lessen the amount of the deficiency of revenue to be required out of the general Treasury. FISCAL YEAR ENDING JUNE 30, 1883. The estimates of revenue for the year ending June 30, 1888, have been given in connection with those of the present year. The estimates of expenditures for the year, to be payable out of definite appropriations, have only just been completed and sent to the Secretary of the Treasury for submission to Congress. They are in detail of all the various objects, and are accompanied by full explanations of the neces sities of the service as well as it may be possible to forecast them. The total amount of the appropriations called for by the estimates is $55,342,150.15. The account for the year ending June 30, 1888, may be stated on the basis of the estimates, as follows, viz: Total estimated ordinary postal revenue Total estimated gross receipts for year ending June 30, 1888..... Deduct total amount of expenditures payable out of appropriations as now estimated... Leaves estimated deficiency of revenue to be supplied out of the general Treasury. Estimated expenditure as above...... Add estimated amount subject to certification on account of mail transportation on Pacific railroads..... Estimated total cost of service. Excess of estimated cost of postal service over estimated postal rev enue 49,-962, 596 46 650,000 00 50,612,596 46 55, 342, 150 15 4,729, 553 69 55, 342, 150 15 1,386, 500 00 56,728,650 15 6, 116, 053 69 The estimated revenue of the year ending June 30, 1888, is $4,729,553.69, or 8.5 per cent., less than the estimated expenditures, and $6,116,053.69, or 10.7 per cent., less than the total estimated cost of the postal service, inclusive of the estimated amount, subject to certification on account of mail transportation on the Pacific railroads. As compared to the year ending June 30, 1887, the estimates for the next fiscal year contemplate an increase of $3,299,885.63, or 6.9 per cent., in the gross postal receipts; of $1,818,181.56, or 3.3 per cent., in the total expenditures payable out of appropriations; and of $1,868,200.56, or 3.4 per cent. in the total cost of the postal service. As in case of the estimates for the year ending June 30, 1887, no allowance is made for the receipts and expenditures of the special-delivery system, and the net profits from this source will tend to diminish the estimated deficiency of revenue shown in the foregoing statement. The deficiency in the revenue for the years 1877 and 1888 are likely to be much less than the amounts at which they are given in the foregoing statements, for two reasons. First, the estimates of the postal revenue are very conservative; and, second, in estimating for the expenditures it is only proper to allow for sums that will exceed rather than fall short of the actual requirements. REVIEW OF FINANCIAL EXHIBITS AND ESTIMATES-1883 TO 1888. The foregoing exhibits and estimates embrace a period of five years from the 1st of July, 1883, to the 30th June, 1888; and a brief review of the changed financial conditions of the service during the intervening time may not be without interest. The net postal receipts for the year ended June 30, 1883, amounted to $45,469,889.79 (excluding amount charged to bad debts), and the total cost of the service during that year, (including the amounts certified to the Secretary of the Treasury under the act of Congress of March 3, 1879, for mail transportation on the Pacific railroads and not chargeable to the appropriations for the postal service,) was $44,436,656.62. For the first time in many years the postal service had become selfsustaining in 1882, and for the year ended June 30, 1883, it yielded a net profit of $1,033,233.17, or 2.3 per cent., over the entire cost of its maintenance. On the 1st October, 1883, the rate of postage on firstclass matter was reduced from 3 cents to 2 cents for each half ounce or fraction thereof, and the immediate effects of the change were again to make the postal service a burden upon the general Treasury. The revenue for the year ended June 30, 1884, was $43,317,502.98, a decrease of $2,152,386.81, or 4.7 per cent., from the revenue of the previous year. The decrease was due mainly to the reduction in the letter rate of postage, but also in no small part to a depression in the business interests of the country, then recently inaugurated. The year ended June 30, 1884, was also a bad one for the postal service in the matter of its expenditures. These were increased at the rate of more than 9 per cent. over those of the preceding year, as against an average annual increase of about 4.5 per cent. for the two years ended June 30, 1883, when the revenue was in an unusually prosperous condition, having yielded an average annual increase of about 11 per cent. The cost of the postal service for the year ended June 30, 1884, was $48,609,541.91, and this was $4,172,885.29, or 9.3 per cent., more than the cost for the year ended June 30, 1883. It was also $5,292,038.93, or 10.8 per cent., more than the amount of the postal revenue. Adding to this amount the surplus revenue of $1,033,233.17, shown for the previous year, it appears that the general Treasury was net loser through the postal service in the sum of $6,325,272.10 for the year ended June 30, 1884, as compared with the year ended June 30, 1883. This great burden, and the further loss of revenue promised by the growing depres sion of business, offered the strongest incentive to a careful economy of the expenditure, so largely augmented during the preceding year. Such was the situation on the 1st July, 1884. At the end of the fiscal year then begun the balance sheet had become still more unfavorable. The net revenue for the year ended June 30, 1885, was $42,560,843.83, and this was a decrease of $756,659.15, or 1.7 per cent., from the revenue of the previous year. The cost of the postal service for the year ended June 30, 1885, was $50,852,509.53, and this was $2,242,967.62, or 4.6 per cent., more than the cost for the previous year. The cost of the service was $8,291,665.70 more than the amount of the postal revenue, and the charge on the Treasury showed an increase of $2,999,626.77 over that of the previous year. The net revenue for the year ended June 30, 1886, was $43,936,248.70, and this was an increase of $1,375,404.87, or 3.2 per cent., over the net revenue of the previous year. The cost of the postal service (estimated in small part only) was $52,190,406.22, and this was an increase of $1,337,896.69, or 2.6 per cent., over the cost of the previous year. The cost of the service was $8,254,157.52 in excess of the amount of the net revenue, and the bnrden on the Treasury was reduced in the sum of $37,508.18, in the face of a loss of $1,099,625.89 from the reduction in the rate of postage on second-class matter, and of an estimated loss of $800,000 from the increase of the unit of weight of first-class matter. The estimated revenue for the year ending June 30, 1887, is 847,312,710.83, and this is an increase of $3,376,462.13, or 7.6 per cent., over the net revenue of the previous year. The estimated cost of the service is $51,860,449.59, and this is an increase of $2,670,043.37, or 5.1 per cent., over the cost for the year ended June 30, 1886. The estimated cost of the service is $7,547,738.76 more than the estimated revenue, and this amount is $706,418.76 less than the amount charged against the Treasury during the previous year. The estimated revenue for the year ending June 30, 1888, is $50,612,596.46, and this is an increase of $3,299,885.63, or 6.9 per cent., over the estimated revenue for the current fiscal year. The cost of the postal service for the year ending June 30, 1888, is esti mated at $56,728,650.15, and this is $1,868,200.56, or 3.4 per cent., more than the estimated cost for the present fiscal year. The estimated cost of the service is $6,116,053.69 in excess of the estimated revenue, and this excess is $1,431,685.07 less than the estimated excess for the current fiscal year. Notwithstanding the loss of nearly $2,000,000 from the reduction in the rate of postage on second-class matter and from the increase in the unit of weight of first-class matter, the estimated amount chargeable to the general Treasury for the maintenance of the postal service for the year ending June 30, 1888, is only $824,014.76 more than the amount charged to the Treasury in the year ended June 30, 1884, and it is $2,175,612.01 less than the amount charged for the year ended June 30, 1885. The estimated amounts chargeable to the general Treasury for the current and the next fiscal years will probably be greatly reduced, both by an increase of the estimated postal revenue and by a decrease of the estimated expenditures. From the tendencies shown, it is evident that with a prosperous condition in the business of the country to favorably influence the revenue, and with a continued exercise of care in regulating the expenditures, the postal service will again at no distant day become a self-supporting institution. SPECIAL-DELIVERY SYSTEM. The special-delivery system was inaugurated on the 1st of October, 1885, under the authority of the act of Congress of March 3, 1885, and the methods employed for conducting its operations were fully explained in my last annual report. The privileges of immediate delivery were restricted by the act to cities and towns having a population of 4,000 or over (555 in number), and they were also confined to mailable matter of the first class. The results of the system for the nine months ended June 30, 1886, are briefly summarized as follows: 1. The total number of letters received for special delivery at all the special-delivery offices was 896,334, of which 622,054, or 69.4 per cent., were received in the mails from other post-offices, and 274,280, or 30.6 per cent., were deposited for local delivery. 2. The total deliveries by special messenger numbered 845,652, or 94.3 per cent. of the whole, leaving 50,682, or 5.7 per cent., to be deliv ered by letter-carriers or other regular employés. 3. The value of the special delivery stamps (in addition to the postage) on the letters received for special delivery was $89,633.40. The amount of fees paid to the messengers, as shown by the report of the Auditor, was $67,652.14, leaving $21,981.26 as a net profit to the Gov. ernment. The value of the special-delivery stamps sold at the 555 special-delivery offices, as reported to this office, was $80,666. The amount sold at all the post-offices cannot be stated, since the sales of all kinds of stamps are embraced in a single item in the quarterly account-current to the Auditor. 4. The average number of messengers employed during each of the nine months was 1,177, and the average monthly compensation paid to each messenger was $6.39. The statistics of the system for the first full year of its operation, from October 1, 1885, to September 30, 1886, are collated as follows, viz: 1. The total number of letters received for special delivery was 1,118,820; of these 785,020 were received in the mails from other offices, and 333,800 were drop letters. 2. The number of letters delivered by special messengers (excluding those delivered by letter-carriers or other regular postal employés) was 1,059,864. 3. The value of the special-delivery stamps attached to letters received for special delivery at special-delivery offices was $111,882. The amount of fees paid, as shown by the audited returns for nine months to June 30, 1886, and reports to this office for the quarter ended September 30, was $84,784.42, leaving a net profit to the Government on these figures of $27,097.58. The value of the special-delivery stamps sold at 555 special-delivery offices was $96,664.30. 4. The average monthly number of messengers employed during the year was 1,112, and the average monthly compensation to each messen. ger was $6.35. 5. The average time consumed in the delivery of letters after receipt at post-offices of destination was 19 minutes. The statistics by quarters, and in detail, of each of the special-deliv ery offices will be found in Table No. 20 attached to this report. The results of the system for the first year of its operation leave no room to doubt the popular appreciation of its usefulness; indeed, considering the limited field to which it was restricted by the law authorizing its creation, it is somewhat remarkable that the patronage it received should have reached such considerable proportions. Defects in the organic act were seen when the system was being introduced, and attention was called to them in your last annual report, with sugges tions for appropriate remedies. The attention of Congress was also invited to the matter in a special communication submitting a draft of a bill to carry out the views of the Department. EXPENDITURES, APPROPRIATIONS, AND ESTIMATES FOR THE SERVICE OF THIS OFFICE. The expenditures for the service of this office for the fiscal year ended June 30, 1886, amounted to $1,082,219.19, the several objects and amounts appearing in table No. 3 attached to this report. In the ag gregate there was an increase of only $10,080.44, or .9 per cent., over the expenditures of the year ended June 30, 1885, and there was a decrease of $5,993.89, as compared to those of the year ended June 30, 1884. In detail of the principal items there was a decrease for the last as com pared to the previous fiscal year of $22,784.38, or 16.5 per cent., for the manufacture of adhesive postage-stamps; of $15,874.81, or 8.5 per cent, for postal cards, and of $17,731.05, or 19.6 per cent., for registered pack age, tag, and official envelopes, and an increase of $66,269.48, or 10.5 per cent., for stamped envelopes and newspaper wrappers. In the quantities furnished there was an increase of 10.2 per cent. in adhesive |